CALL US

111-222-499

FIND US ON FACEBOOK

Press Release

Feedback from private sector important for appropriate

Feedback from the private sector plays a fundamental role in formulating appropriate policies for the trade, industry and economy. Being premier Chamber of the country, the Lahore Chamber of Commerce & Industry has formed a set of proposals for the Federal Budget 2021-22 after various brainstorming sessions and forwarded to the related government departments.

While talking to the Member Inland Revenue (Operations) Dr. Muhammad Ashfaq and Member Inland Revenue (Policy) Chaudhry Muhammad Tariq at Zoom on Monday, the LCCI President Mian Tariq Misbah said that LCCI Budget Proposals are a composition of the issues being faced by the business community and recommendations for their best possible solution.

The LCCI President Mian Tariq Misbah said that the lack of balance in the tax incentive structure is resulting in De-Industrialization and needs to be addressed. The LCCI has recommended that the incentives which are currently provided to the five zero rated sectors should also be provided to other important export sectors of the economy e.g. Engineering, Pharmaceutical, Rice and Halal Meat etc.He said that duties and taxes on the raw material for pharmaceutical industry should be brought down to reduce the input cost.

Tariff rationalization is need of the hour, Mian Tariq Misbah said and added that LCCI has given comprehensive proposals regarding the Tariff Rationalization. He said that all the raw materials which are not manufactured locally should be declared zero rated through elimination of Custom Duties, Additional Custom Duties and Regulatory Duties.

He hoped that the new Sales Tax e-Refund system (Faster Plus) would be improved further by removing any technical glitches. Furthermore, the Income Tax Refunds should also be paid on urgent basis through this system. He said that the rate of 17% Sales tax on the inputs of various export oriented industries is extremely high and needs to be brought down.

The LCCI President said that for the facilitation of commercial importers and making sure that imports of vital raw materials are not affected, the advance Income Tax at import stage (Withholding Tax) should be eliminated and the Final Tax Regime should be implemented.

He said that the condition of disclosing CNIC for sale to unregistered person should be abolished in the larger interest of small businesses in the country in these challenging economic times. The 3% Further Tax chargeable on all supplies made to unregistered persons should be abolished. He said that the rate of Turnover Tax should be reduced from the current 1.5% for the retail sector.

Mian Tariq Misbah said that no audits should be conducted for the next 2 years. This will help to improve the Business Climate and enable the businesses to recover from the adverse impact of COVID-19. He said that one page return form should be introduced.

There should be a single Audit for Sales Tax, Income Tax and Withholding Tax. The frequency of this single Audit should be reduced to once in 3 years. He said that the Commercial Importers should be allowed to import against Advance Payments up to US$ 20,000/- He said that the Lahore Directorate of valuation should be empowered like Karachi Office to hold meetings of valuation committees since a heavy percentage of importers are from Lahore and up-country areas.

The LCCI President said that the issue of the misuse of tax exemptions granted to industries in FATA/PATA on the import of raw materials needs to be resolved. He said that the local LPG production caters to 60-70% of demand but it is subjected to 17% Sales Tax and Rs 4,669 per MT Petroleum Development Levy as compared to only 10% Sales Tax and no Regulatory Duty on imported LPG. These anomalies need to be rectified

“To facilitate the production of lithium ion batteries in Pakistan, the import duties on its major raw material Li-ion cells (HS code: 8507.6000) should be eliminated”, Mian Tariq Misbah added. He said that the current Tax exemptions for the companies engaged in IT business (both local and exports) should be extended for next Five years. He said that the Sales Tax on IT services (infrastructure installation, support and services) must be reduced by 50%. The taxes and duties on the used computer systems and laptops should be eliminated. The duties on computer hardware components, printers and networking equipment etc. should be reduced.

“Being a non-profit organization, LCCI should be exempted from the payment of Income Tax”, the LCCI President concluded. Member Inland Revenue (Operations) Dr. Muhammad Ashfaq and Member Inland Revenue (Policy) Chaudhry Muhammad Tariq assured that the suggestions would be considered.